Invacare Questions Finances of 34% of Bid Winners

ELYRIA, Ohio — More than a third of the bid winners in the
Round 1 rebid of competitive
bidding have “questionable financial foundations,” according to
a new report from Invacare Corp.

Following its analysis of 359 suppliers awarded contracts by
CMS, Invacare found that:

• 8.5 percent have credit limits of less than $10,000 (meaning
  they can buy very little product);
• 5.4 percent are on credit hold (meaning they cannot purchase
  any product);
• 6.7 percent are so far behind on their payments that their
  accounts have been turned over for collections or legal process
  (meaning they cannot purchase any product); and
• 14 percent have no account with the company (meaning they may
  be brand new and inexperienced firms).

“As the largest U.S. manufacturer of home medical equipment,
this means that over one third of the firms that are authorized to
provide Medicare beneficiaries home oxygen therapy, power
wheelchairs, enteral nutrition, home care beds, CPAPs and RADs
(respiratory devices), walkers and mail order diabetic supplies are
in a precarious financial situation and are unlikely to be able to
provide the medically necessary items and services over the three
year contract period,” Invacare said in a release.

As the industry’s largest creditor, Invacare said its finance
department requests two years of audited financial statements and
also uses credit reporting agencies such as Dun & Bradstreet
when evaluating a company’s credit-worthiness. In contrast, the
company said, CMS required only one year of unaudited financial
statements from those who submitted bids in the Round 1 rebid.
Neither did the agency require bidders to submit any reports from
credit agencies.

When CMS announced the names
of the bid winners in November, an agency release included this
statement from CMS Administrator Dr. Donald Berwick: “Each of these
contract suppliers has met our stringent standards, so
beneficiaries can be assured they will receive their equipment and
supplies from legitimate and quality suppliers at prices that are
more in line with the current market.”

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